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CERTIFICATE OF INSURANCE WITH ADDITIONAL INSURED
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Ken
It seems the insurance industry is putting new restrictions in place.
For all but the small jobs, our company uses subcontractors for installation. We have a network of subs across the US, but at times need a specialty sub which may not be set up in our system. When we add them, we request a Certificate of Insurance up front with our company named as Additional Insured. It seems to be happening more often lately that the insurance company of the sub will not issue the Certificate of Insurance until the sub has a written contract. We don’t want to enter the sub in our system and issue the Purchase Order without a Certificate of Insurance with us named as Additional Insured.
What has happened?
Another question. We issue a Purchase Order to the sub for the job, the Certificate of Insurance says "as required by written contract". Is a Purchase Order considered a written contract?
One last question. The Additional Insured was a simple statement on the Accord form stating "Certificate Holder is listed as Additional Insured’. I’m now seeing some Certificate of Insurance as a multi page document with Additional insured buried within the pages – what changed?
Dan
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RESPONSE
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Lot of questions. Quite a mouthful on this Thanksgiving holiday. I'll do my best to respond.
Whether you give in and enter the subcontractor into your system before insurance is procured, or try and get the carriers to issue the endorsement for additional insureds doesn't seem a battle worth having. I don't see the problem but I am not aware that carriers have started making a fuss over issuing additional insured endorsements.
A carrier doesn't need to wait for its insured to have a contract before issuing an additional insured endorsement. The insurance policy most likely covers the insured for contractual obligation to provide insurance or indemnity for the insured's covered activities. So it shouldn't matter to the carrier if there is a contract in place. If there has been a change in procedure it no doubt came about as a result to litigation which has permeated every aspect of our personal and business lives. Being safe to the point of being obnoxious. Anyway, if the subcontractor shows it has insurance you should enter it into your system in anticipation of getting the additional insured endorsement. You can always delete the entry.
Your Purchase Order is not a contract unless it has been agreed to by the subcontractor. You should have a Subcontractor Agreement in place. In your case you need a Master Subcontractor in place. Once you have that then you can send out your Purchase Order to confirm each job and job details. The Standard Form Subcontractor Agreement is simple and clear. It calls for both contractor and subcontractor to hold necessary licenses and insurance.
I am not aware that the Certificate of Insurance, typically issued by the insurance broker to bind coverage, has changed. Perhaps some of the insurance brokers listed on The Alarm Exchange would care to comment...... [instead of just complain that I don't give them enough promotion].
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